Unindo to continue helping SMEs

Adianto P. Simamora, The Jakarta Post, Yogyakarta

The United Nations Industrial Development Organization (Unido) said that it would continue providing technical assistance to Indonesia to help empower the country's small and medium enterprises (SMEs).

The director general of Unido, Carlos Alfredo Magarinos, said that the assistance, such as the transfer of technology, knowledge, skill and information, to SMEs was necessary to improve the quality of local products.

"We are going to expand our mission to help empower the SMEs in this country, making more people export products to the international markets," Magarinos told reporters following a one- day visit to Yogyakarta on Saturday.

During his visit, Magarinos met Yogyakarta Governor Hamengkubono. He also visited two projects in the province, a leather processing plant and a shrimp processing plant, which have been developed with Unido's assistance.

Magarinos added that in the midst of the economic crisis, SMEs could play a strategic role to absorb many workers, thus helping to solve the country's unemployment problem. This in turn would help cut the poverty rate.

According to him, an increase in unemployment would create serious problems for the country, such as a rising crime rate and even terrorism.

"Poverty is the greatest risk for terrorism and security so if we want to remove the problems, the first concern should be to fight against poverty not just with emergency food aid," Magarinos said.

According to government data, the number of unemployed people in the country is about 40 million.

The ongoing economic crisis, which first hit the country in mid-1997, has caused many companies to shut down, forcing millions of people out of work.

Worse still, the number of unemployed is expected to rise as about 2.5 million job seekers enter the job market every year.

To absorb the huge number of job seekers, the country's economy needs to grow by about 6 percent 7 percent per year.

The government, however, is only targeting economic growth of 4 percent this year.

SMEs, however, have proven their ability to withstand the economic crisis and to employ a huge number of people.

Tony Agus Ardi, president director of PT Indokor Indonesia, has welcomed Unido's assistance.

"Unido's support will help rejuvenate the growth of SMEs in Yogyakarta province," Tony said.

Yogyakarta currently applies a three-pillar scheme to develop SMEs involving Governor Hamengkubono representing local government, Gadjah Mada University and local SMEs.

A pilot project of the scheme is a shrimp farming company developed by Indokor, which exports its shrimp to the U.S., Japan and Singapore.

Indokor has establish the 15-hectare intensive shrimp farming industry on the southern coast of Bantul, which is also being developed as a research and development center in cooperation with Gadjah Mada University. The area belongs to the Yogyakarta royal family.

The integrated shrimp farm is equipped with ultra violet sterilization and ozone treatment facilities to process shrimp to meet the stringent quality standards set by the U.S. Food and Drug Administration.

Tony said that the facilities would help local shrimp farmers and small businesses to meet the quality standards required by consumers in developed countries.